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Johnson & Johnson worldwide sales dips by 2.4% in Q4

Johnson-and-Johnson

Johnson & Johnson has revealed lower sales of $17.8 billion for the fourth quarter of 2015, a decrease of 2.4 per cent as compared to $18,3 billion in the fourth quarter of 2014. Its sales in US increased 8 per cent to $9.3 billion from $8.6 billion. However, international sales decreased by 11.7 per cent to $8.5 billion from $9.7 billion mainly due to a negative currency impact.Johnson-and-Johnson

Net earnings for the fourth quarter of 2015 improved by 27.5 per cent to $3.2 billion from $2.5 billion mainly due to other income of $1.2 billion as against other expenditure of $1 billion in the similar period of last year. Its R&D expenditure increased by 8.7 per cent to $2.9 billion from $2.6 billion. Worldwide sales for the full-year 2015 declined by 5.7 per cent to $70.1 billion from $74.3 billion. Its sales in US increased by 2.6 per cent to $35.7 billion from $34.8 billion. International sales, however,  decreased by 13.1 per cent to $34.4 billion from $39.5 billion. Excluding the net impact of acquisitions, divestitures and hepatitis C sales, on an operational basis, worldwide sales increased 6.5%, domestic sales increased 10.6% and international sales increased 3.0%.

Net earnings declined by 5.6 per cent to $15.4 billion for the full year ended December 2015 from $16.3 billion in the previous year. Its R&D expenditure increased by 6.5 per cent to $9.0 billion from $8.5 billion.  It has shown other income of $2.1 billion as against other expenditure of $0.1 billion in the previous year.

Alex Gorsky, chairman and CEO said, “Johnson & Johnson delivered strong underlying growth in 2015, driven by the performance of our pharmaceutical business and iconic consumer brands. As we enter 2016, our core business is very healthy, and the recent decisive actions we’ve taken in support of each of our businesses position us well to drive sustainable long-term growth, faster than the markets we compete in.”

Gorsky continued, “I want to thank all of our colleagues for contributing to these results through their commitment and dedication to the people around the world who rely on our products.”

The company announced its 2016 full-year guidance for sales of $70.8 billion to $71.5 billion reflecting expected operational growth in the range of 2.5% to 3.5%.  Excluding the impact of acquisitions, divestitures and hepatitis C sales, operational sales growth is expected to be in the range of 4.5% to 6.0%. Additionally, the company announced adjusted earnings guidance for full-year 2016 of $6.43 to $6.58 per share reflecting expected operational growth in the range of 5.3% to 7.7%. Adjusted earnings guidance excludes the impact of after-tax intangible amortization expense and special items.

New product sales growth was negatively impacted by lower sales of Olysio/Sovriad (simeprevir) due to competitive entrants.  Strong growth in new products include Invokana/Invokamet (canagliflozin), for the treatment of adults with type 2 diabetes; Imbruvica (ibrutinib), an oral, once-daily therapy approved for use in treating certain B-cell malignancies, or blood cancers; Xarelto (rivaroxaban), an oral anticoagulant; and Zytiga (abiraterone acetate), an oral, once-daily medication for use in combination with prednisone for the treatment of metastatic, castration-resistant prostate cancer.

Additional contributors to operational sales growth were Stelara (ustekinumab), a biologic approved for the treatment of moderate to severe plaque psoriasis and psoriatic arthritis; Invega Sustenna/Xeplion/Trinza (paliperidone palmitate), long-acting, injectable atypical antipsychotics for the treatment of schizophrenia in adults; Concerta (methylphenidate HCI), for the treatment of attention deficit hyperactivity disorder; and Simponi/Simponi Aria (golimumab), biologics approved for the treatment of a number of immune-mediated inflammatory diseases.

Also in the quarter, the acquisition of Novira Therapeutics, Inc., a privately held clinical-stage biopharmaceutical company developing innovative therapies for curative treatment of chronic hepatitis B virus infection, was completed.

Subsequent to the quarter, the company announced on January 19th, a restructuring of certain medical devices businesses. The company’s consumer medical devices businesses, vision care and diabetes care, are not impacted by these actions. The restructuring is being undertaken to accelerate the pace of innovation, address unmet patient needs and drive growth. The actions are expected to result in ongoing annualized, pre-tax cost savings of $0.8 billion to $1.0 billion, the majority of which is expected to be realized by the end of 2018, including approximately $200 million in 2016.

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